Retail Customer Service Still Counts

According to this recent study from the Axsium Group and Empathica, over 50% of North American retail shoppers do not feel that employees appear to be genuinely interested in serving them. Eighty percent of respondents indicated a positive impact on their shopping experience when staff appear motivated and eager to serve them. According to the study, “At one retail client, customers who were offered a helpful suggestion of an additional product to the initial product they were considering experienced higher rates of satisfaction and had a basket size 31 percent larger than those who did not receive a suggestion during their store visit.”

So what do retailers need to do differently to create a more engaging (and higher value) shopping experience for their customers? The key finding of the aforementioned study is that well trained and engaged employees are the principal driver of customer experience and higher per customer spend. Creating those well trained and engaged employees begins with hiring people who are interested in doing the jobs. Their managers need the tools to onboard them, train them and coach them. Providing them with flexible schedule options is another key driver to retaining them.

In this recent Stores story about JoS. A. Bank, Andrea Boling, vice president of human resources discusses the various ways in which Kronos has helped them improve not only the efficiency of their hiring process, but also improved the job fit of the candidates they hire. She cites the following returns on their implementation of the Kronos Workforce Talent Acquisition solution:

27 percent reduction in turnover of retail employees

Increased employee productivity

A one- to three-day reduction in time-to-hire

Average sales associate tenure rose from 2.2 years to 3.4 years

Store managers who had been with the company for less than a year dropped from 22.2 percent to 16.9 percent

5 thoughts on “Retail Customer Service Still Counts”

I’m frankly surprised that “only” 50% of North American retail shoppers do not feel that employees appear to be genuinely interested in serving them. My experience is that the percentage if disengaged and uninterested employees in retail is more in the 70 percent (plus) range.

This gets back to a point I was just discussing with one of my brothers-in-law last night: the state of customer service in America is overwhelming terrible, with most service just bad or indifferent.

In fact, it’s almost shocking these days when you so manage to bump into good customer service because it is so extremely rare and hard to find.

It’s great if the Kronos solution is helping to hire better people, because that is a very big part of the equation. The other big part of the problem, however, is something that probably not even Kronos can help with — the indifference and lack of commitment to customer service from the retailers themselves.

I could list quite a few, of course, but Macy’s and Best Buy jump to my mind as business school case study examples of how NOT to handle customer service, and, as models for how to treat customers so that you drive them away and slowly cripple the business.

Hiring better people with the help of the Kronos solutions is Part 1 of how to fix this problem. Part 2 is better training on the part of the retailers. Part 3 is a clear and unwavering commitment to treating customers right and staffing stores and retail locations at a level that makes great service more than just a “luck of the draw” situation.

A big strategic question for retailers is “Should we try to give the customer a good deal or should we try to maximize our own short-term profitability?” Many retailers have a strategy of pushing something that is poor value (but high margin) on customers who are making a purchase. The classic case is selling a nearly worthless extended warranty.

No matter how nice and attentive the sales staff is, if their final action is to try to coax customers into making a bad buying decision, then the customer experience will be an unhappy one.

Study after study has been produced on this subject, all of them indicating that customers will drive by the competition and pay more for great service. Retail has always had the advantage of being able to construct the service to sales value chain much more easily than can be done in other industries. Yet service remains consistently poor.
That said, even in retail, delivering a differentiated level of service to every customer, at every location, every day is not a challenge for the timid. It takes intense focus, a passion to be the best, a commitment to learning/training and universal management buy in. Retailers who have succeeded in this quest have found a way to engage the head, heart and hands of their employees who ultimately can’t “fake” a consistently outstanding service experience.
The poor economy has undoubtedly not helped the situation. Increased pressure for financial performance combined with an underemployed, oftentimes unmotivated workforce doesn’t seem to be a recipe for great service. Tools like Kronos combined with a unwavering commitment to exceed customer expectations seem like two huge steps in the right direction.

Service is as much an issue in non-profits as in retail. And I believe the web must pay the same level of attention to service.
Whether it’s a website, an inperson transaction or any other interaction between company and customer, the walk-away feeling by the customer
Is essential to return business and retention. Every employee needs to understand the principles of good service, of listening and of responsiveness
If they are the face of the organization.

As Dave Alemeda notes, keeping people motivated in periods of high unemployment, can be difficult, since mid-managers who are most likely to be supervising the worker know that they’ll be able to easily find a replacement. Why exert the effort to engage someone when you can just try another?

And let’s be honest — can you blame someone for not being particularly engaged on a job where they’re making a wage that’s at or near a minimum wage, and they have to stand on their feet all day while dealing with the good, the bad and the ugly of their customers?

I love the analytics that Kronos is offering HR to help slice and dice the data to know what levers they should be pushing to help meet the challenge of retail engagement.